Gold Settles Higher As WB Lowers Growth Forecast
Washington (June 11) Gold futures ended higher for a third straight session on Wednesday, tracking declining global equity markets after the World Bank predicted global economic growth to be weaker than previously estimated. With little other economic indicators, investors continued to seek safety in the precious metal even as the dollar trended lower against some major currencies.
The World Bank in its latest World Economic Prospects said global economic growth in 2014 is likely to be weaker than expected, with the poor weather in the US, financial market turbulence and the Ukrainian issue serving as drags.
Gold for August delivery, the most actively traded contract, gained USD1.10 or 0.1% to close at USD1,261.20 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.
Gold for June delivery scaled an intraday high of USD1,265.50 and a low of USD1,257.90 an ounce.
On Tuesday, gold futures ended higher after China's inflation accelerated to a five-month high and US equity markets dropped with all major averages in negative territory.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, remained unchanged at 787.08 tons on Wednesday, from its previous close.
The dollar index, which tracks the US unit against six major currencies, traded at 80.77 on Wednesday, down from its previous close of 80.81 late Tuesday in North American trade. The dollar scaled a high of 80.90 intraday and a low of 80.67.
The euro traded lower against the dollar at USD1.3530 on Wednesday, as compared to its previous close of USD1.3547 late Tuesday in North American trade. The euro scaled a high of USD1.3557 intraday and a low of USD1.3522 .
The World Bank today cut its global economic growth forecast to 2.8%, significantly lower than the earlier estimate of 3.2%, citing slower than expected growth in the US, China and Russia . However, the bank left its forecast for 2015 and 2016 broadly unchanged at 3.4% and 3.5%, respectively.
In Europe , unemployment in the UK decreased more than expected in the three months to April, falling to 6.6%, from 7.2% in the November - January period.
Meanwhile, unemployment rate across the member nations of the Organization for Economic Cooperation and Development dropped to 7.4% in April from 7.5% in March. Around 45 million persons were unemployed in April, 4.9 million less than the peak in April 2010 , but still 10.3 million more than in July 2008 , the OECD said Wednesday.
Source: Alliance News
